Cuba vendetta sparks war across Atlantic

Trade Row: Washington's crusade against Castro, which has infuriated its allies, is yet another example of its unilateral behaviour

The ban on entry into the US of seven business executives, including two prominent Britons, is fast turning Washington's election-year vendetta against Fidel Castro's Cuba into one of the most bitter and potentially damaging transatlantic trade row in more than a decade.

As tensions grew yesterday, Britain delivered a fiercely worded protest to the State Department over what one diplomat called the "disgraceful and preposterous" blacklisting of the two British nationals, the former Bank of England deputy Governor Rupert Pennant-Rea, and Sir Patrick Sheehy, former non- executive chairman of BAT Industries. All seven blacklisted men are from the Canadian mining company Sherritt International.

In London, the Government is considering how to retaliate against this first implementation of the now notorious Helms-Burton Act, passed by the Republican-controlled Congress, containing sanctions against foreign companies which do business with Cuba.

Tit-for-tat bans on individual American citizens seeking to visit Britain would be hard to introduce, officials admit. More likely, they say, is a strengthening of the little-used Protection from Trading Restraints Act, which permits recovery in British courts of damages suffered abroad.

According to reports published in the US, between 100 and 200 companies are currently committing Sherritt's offence of "trafficking in confiscated US property" in Cuba, and thus risk having their own top executives barred from the US. The State Department will not say how many companies are on its blacklist, but a spokesman noted that Cuba claims to operate 250 joint ventures with foreign partners, all of whom could be potentially liable.

British officials believe the list contains around 15 company names, of which "perhaps two or three" may be British, among them almost certainly the sugar concern Tate and Lyle.

Thus far, only two companies have been publicly identified by the State Department apart from Sherritt: the Mexican telephone concern Grupo Domos and the Italian telecommunications group STET, which between them own 49 per cent of Cuba's state telephone company. Like Sherritt, STET and Grupo Domos are likely to be informed that their top executives and their families will be banned from US soil.

In anticipation of such a move, Mexico yesterday formally protested against the Helms-Burton Act, saying it violated the principles of the United Nations, the World Trade Organisation, and NAFTA, the trade pact linking the US, Canada and Mexico.

Canada has reacted in outrage to the American action, and plans to take the dispute to NAFTA. Meanwhile, a coalition of some 20 Canadian religious and union groups is urging a reprisal boycott of Florida by the Canadian tourists who spend some $1.3 billion a year in the state, unless President Clinton shelves the so-called Title III provision of Helms-Burton.

Title III - which permits US citizens, including many naturalised Cuban- Americans, to bring suits against foreign companies which are using properties they owned before the Castro take-over in 1959 - is potentially far more disruptive than the headline-stealing, but largely symbolic, travel ban affecting a handful of individuals.

On paper, the claims could total billions of dollars. According to opponents of the measure (who once included President Clinton) Title III will clog US courts, lead to serious international legal wrangles and further worsen relations between Washington and key allies. President Clinton has until next Tuesday to decide whether to grant a waiver.

But few believe that Mr Clinton will abandon a law that commanded a veto-proof majority on Capitol Hill - just four months before an election in which Florida and New Jersey, the two states where the Cuban-American vote is most important, are both key electoral college prizes. New Jersey is a swing state which Mr Clinton must win. In Florida, the Democrats feel they have a chance of their first victory in 30 years.

In vain do Britain, Canada and other countries point out that the US ignored a similar sanctions threat in the 1970s from Arab countries over trade with Israel - precisely on the grounds that it was extraterritorial and thus illegal. On Cuba, they have long come to realise, as one diplomat put it, that "the US parts company with reality. We don't approve such sanctions against Iran either. However, we understand the motives, because Iran is a pariah state involved with terrorism. But Cuba?"